China’s Extraterritoriality: A New Stage of Lawfare

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China’s Extraterritoriality: A New Stage of Lawfare

Authors

Mathieu Duchâtel

Resident Senior Fellow and Director of International Studies

Dr. Mathieu Duchâtel is a Resident Senior Fellow for Asia at Institut Montaigne, and Director of International Studies.

Georgina Wright

Resident Senior Fellow and Deputy Director for International Studies

Georgina Wright is Senior Fellow and Deputy Director for International Studies at Institut Montaigne.

Extraterritoriality - the application of national laws abroad - is gaining traction. In a world characterized by strategic competition and weakened international organizations, many countries are turning to law to secure their interests. This includes China.

Extraterritoriality has expanded under Xi Jinping. China no longer sees it as a relic of "the century of humiliation" during which foreign powers imposed consular jurisdiction on Chinese soil. Today, Chinese extraterritoriality has three aims: to defend against foreign interference and sanctions; to legitimize China’s foreign policy actions and strengthen its global influence; and as a way to deploy its public security agenda abroad.

China is also exploring a more offensive approach to extraterritoriality in the form of economic sanctions – though it has yet to use them. A more offensive use will depend on the willingness of the top leadership to employ such tactics during moments of international tension; a stronger international role for the renminbi and lower overall exposure to the dollar; and the countermeasures that third-countries could take to respond to Chinese extraterritorial norms.

The EU must act. Europeans need to understand the risks associated with Chinese extraterritoriality and plan accordingly. The EU should continue working with like-minded partners and be ready to deny access to the EU single market in case of abuse. Losing access to the single market would be deeply damaging to China’s interests and constitute a powerful deterrent for the EU.

Institut Montaigne’s latest issue paper provides a framework for understanding all dimensions of Chinese extraterritoriality and offers decision-makers and businesses a roadmap for an informed response. Understanding the implications of Chinese extraterritoriality is crucial for governments and businesses, and should be integral to the EU's approach to economic security.

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